2013 (6) TMI 14 - HC - Income Tax

Maintainability of appeal - Held that - The instruction dated 15.5.2008 fixing monetary limit for filing appeal has statutory flavour thus as tax/revenue effect in the instant appeal is less than Rs. 4, 00, 000/- appeal need to be rejected.

Summary

Issues:
Challenge to judgment of Income Tax Appellate Tribunal under Section 260-A of Income Tax Act-1961 for Assessment Year 2002-2003. Interpretation of powers of Income Tax Appellate Tribunal under Section 254(2) of the I.T. Act. Validity of recalling order by Tribunal for reasons beyond Rules 24 and 25 of Appellate Tribunal Rules, 1963. Justification for recalling order necessitating rehearing and fresh order. Consideration of facts already adjudicated by Tribunal.

Analysis:
The High Court addressed the appellant's challenge against the Income Tax Appellate Tribunal's judgment for the Assessment Year 2002-2003 under Section 260-A of the Income Tax Act-1961. The appellant questioned the Tribunal's powers under Section 254(2) of the I.T. Act to recall its order beyond the scope of Rules 24 and 25 of the Appellate Tribunal Rules, 1963. The substantial questions of law raised focused on the Tribunal's authority to recall orders and the necessity for rehearing and fresh adjudication. The Court considered whether the Tribunal erred in recalling its order dated 27.7.2007 and reevaluating issues already discussed in detail.

The respondent argued for dismissal of the appeal based on the insertion of Section 268A of the Income-tax Act by the Finance Act, 2008, with retrospective effect from April 1, 1999. The respondent contended that the monetary limit set by the CBDT for filing appeals, particularly in cases with a tax effect below Rs. 4,00,000, rendered the appeal unfit for consideration. The CBDT's notification dated 15.5.2008 specified that no reference should be made to the High Court for cases below the specified revenue limit.

The Court acknowledged that the tax effect in the present appeal was below Rs. 4,00,000 and that the CBDT's instruction regarding monetary limits for appeal filings carried statutory weight under Section 268A(5) of the Income-tax Act, 1961. Consequently, the Court deemed the appeal incompetent due to non-compliance with the Board's instruction. The appeal was dismissed solely on this ground, with no costs imposed, and any interim orders were vacated.

In conclusion, the High Court's judgment primarily revolved around the appellant's challenge to the Income Tax Appellate Tribunal's decision under Section 260-A of the Income Tax Act-1961 for the Assessment Year 2002-2003. The Court also considered the Tribunal's powers under Section 254(2) of the I.T. Act and the impact of the CBDT's monetary limits on appeal filings. The decision to dismiss the appeal was based on the statutory nature of the CBDT's instruction and the appeal's failure to meet the specified revenue threshold.